France pushes to centralize crypto regulation under ESMA

The Banque de France is advocating for the European Securities and Markets Authority to become the sole regulator for the bloc’s crypto markets, a move that would consolidate supervisory power in Paris.

On Oct. 9, François Villeroy de Galhau, Governor of the Banque de France, used a keynote address at the ACPR-AMF Fintech Forum to issue a direct call for the European Securities and Markets Authority to be granted full supervisory authority over crypto-asset issuers across the European Union.

The proposal, framed by Villeroy de Galhau as a necessary evolution beyond the existing MiCA regulatory framework, seeks to centralize enforcement power within the Paris-based authority to combat what he described as a growing threat to “monetary sovereignty” from non-European stablecoins.

“This framework would benefit from much more strictly regulating the multi-issue of the same stablecoin from and outside the European Union, to reduce the risks of arbitrage in the event of stress. I also advocate, along with the president of the AMF, for European supervision of crypto-asset issuers, carried out by ESMA,” Villeroy de Galhau said.

France’s push ties monetary sovereignty to digital innovation

Villeroy de Galhau’s call to consolidate crypto regulation under ESMA is only one part of a broader vision that ties Europe’s monetary future to its ability to innovate without losing control of its currency. According to Villeroy de Galhau, maintaining the “pivotal role” of central bank money is essential if the euro is to withstand the pressure of dollar-backed stablecoins and the growing dominance of non-European digital payment systems.

Notably, the governor warned that the rapid rise of USD-pegged stablecoins could gradually erode the euro’s influence as a settlement medium. The Banque de France, he said, sees the introduction of a “wholesale” digital euro as a necessary step toward securing Europe’s monetary independence and deepening financial integration across the bloc.

The French central bank has already made progress on this front. Through projects like Pontes, it aims to allow financial institutions to settle tokenized assets directly in central bank money using either the Eurosystem’s existing TARGET services or a distributed ledger.

A second phase, known as Appia, envisions a unified platform where tokenized central bank money, tokenized bank deposits, and tokenized securities coexist and interact seamlessly.

“This will overcome many technical obstacles to the integration of European capital markets. This ‘wholesale’ digital currency has therefore become a strong priority: we must accelerate, and the Banque de France will do everything to contribute to this acceleration,” Villeroy de Galhau noted.

Villeroy de Galhau challenges the private sector

Alongside this public sector push, the Governor issued a sharp challenge to the private sector. He argued that a central bank digital currency alone cannot fuel the entire tokenized economy and pressed European banks to develop their own tokenized money.

He welcomed a nascent consortium of nine European banks exploring this space, but stressed that the technical path, whether tokenized deposits or bank-issued euro stablecoins, is less important than the outcome. “We could have both,” he stated, “but we must not end up with neither.”